Brownfield

An infrastructure asset already built and operating, with a record of cash flows. Its risks are mainly operational and regulatory, so it sits at the lower-risk end of infrastructure.

Where you will meet it

Brownfield appears in 4 learning outcomes on the CFA syllabus. A few of them:

• Explain the defining features of infrastructure investments
  CFA Level I · Alternative Investments

  “Brownfield assets are already operating and carry lower risk than greenfield projects still to be built, where construction and demand risk dominate.”

• Explain the key characteristics of infrastructure as an investment
  CFA Level III · Private Markets Pathway

  “Revenue can be regulated, contracted or demand-based, as with tolls, and assets are either greenfield (to be built) or brownfield (already operating).”

• Explain how an infrastructure project is financed and managed from development through operation, and what debt and equity each contribute
  CFA Level III · Private Markets Pathway

  “Ramp-up and operation bring stable brownfield cash flows, followed by refinancing and, under a concession, eventual handback.”

• Weigh risk and return across infrastructure strategies and relative to other assets within a strategic allocation
  CFA Level III · Private Markets Pathway

  “Core infrastructure (regulated utilities and contracted brownfield assets) sits at the low-risk end.”

Practise it

• Today's practice question One question, with every wrong option explained.
• Free Level I diagnostic test Twelve questions that show which topics to start with.
• Free finance calculators Check your arithmetic on the exam's core formulas.

All terms beginning with B · Glossary